Turnbull v. Home Fire Insurance

Russum, J., delivered the opinion of the Court. The appellant (plaintiff below) brought suit in the Court of Common Pleas of Baltimore City against the appellee (defendant below) to recover the loss by fire of $812.54, upon a policy of insurance on a two-story brick building situate on the west side of Streeper street, attached in rear of and communicating with the brick building Nos. 2805 and 2807 Hudson street, comer of Streeper street, the whole occupied as a bleaching and dyeing establishment by one Plugene Fisher, the loss under which was payable to the plaintiff as mortgagee of said Fisher. This policy was issued April nth, 1893, and declared that it was “made and accepted ” subject to certain conditions, among which were the following: 1st. That it should be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning said insurance, or the subject thereof; and 2d. If (any usage or custom of trade manufacture to the contrary notwithstanding) there be kept, used or allowed on the insured premises benzine, benzole, dynamite, ether, gasoline or petroleum of greater inflammability than kerosene of the United States standard (which last may be kept for light) and kept for sale according to law, but in quantities not exceeding five barrels, provided it be drawn and lamps filled by daylight, or at a distance of not less than ten feet from artificial lights. These conditions were pleaded by the defendant company in answer to the declaration, and the case was tried in the Court below upon two issues: (a) Whether there had been any concealment by the insured of any material fact con — 320 — cerning the insurance, or the subject thereof; and (b) whether the defendant company had consented to the use of gasoline and waived the condition of the policy relating thereto. It appears from the evidence that Fisher, the insured, held a policy for $2,500.00 on the building Nos. 2805 and 2807 Hudson street, issued by the German Fire Insurance Company, of which one Koppelman, a licensed insurance broker, was vice-president. This policy contained a written clause allowing the use of gasoline for illuminating purposes, and was issued in the month of November, 1889, upon a rating of one dollar and ninety cents per hundred, made by the chief inspector of the Association of Fire Underwriters of Baltimore City, of which association both the German Fire Insurance Company and the defendant company were members. This rating was made upon a slip of which contained a list of the “ deficiencies,” the rate charged for each, and showed that one dollar of the one dollar and ninpty cents per hundred fixed as the rate for calculating the premium on this (Hudson street) building, was estimated for the use of gasoline for illuminating purposes. The total rating, but not the items, was furnished to the several members of the association, and the itemized “ slips ” were open to the inspection of the members, who might desire to see them. The building on Streeper street, and which was attached in the rear of, and communicated with the Hudson street building, was never surveyed or rated by the association. Fisher, the insured, applied to Koppelman for insurance on the Streeper street building in the German Fire Insurance Company, which was declined ; whereupon he accepted Koppelman’s offer to place it for him in another company. Koppelman sent his clerk to inspect the building and then wrote up the application for insurance on behalf of Fisher and took it to Williams, the president of the defendant company, who inquired what the rate was, and being told that it was $1.90 per hundred, issued the policy sued on, and delivered it to Koppelman, by whom it was delivered to Fisher. — 321 — At the trial of the case below, four exceptions were taken by the plaintiff. The first and third exceptions relate to the refusal of the Court to allow the plaintiff to offer evidence tending to prove that the fire which destroyed the building “ was not started or caused by the use of gasoline.” This testimony was clearly inadmissible, because it was not relevant to any issue made by the pleadings, or which could have been properly framed in a suit on the policy which is the subject-matter of this controversy. The condition of the policy was that it should be void if, among other things, gasoline was kept, used or allowed on the insured premises, and the question was whether there had been any violation of this condition on the part of the insured. The cause of the fire was not, in any way, involved, and as such testimony was calculated to mislead the jury it was properly rejected. Howell's Exr. v. Balto. Eq. Society, 16 Md. 386, 387 ; 1 May on hisiirance, sec. 220 ; Parson’s Merc. Law, 505 ; Kyte v. Com. Union Asso. Co., 149 Mass. 123. The second exception was to the overruling of the plaintiff’s objection to evidence, offered by the defendant, tending to prove that the rate of one dollar and ninety cents, per hundred, was not an unusual rate—not such a rate as, at the time the policy sued on was issued, would indicate to the insurer the fact that gasoline or any other material, equally hazardous, was to be kept, used, or allowed on the insured premises. The record shows that it was conceded in the Court below, as it was in the argument in this Court, that the defendant company did not have actual knowledge that gasoline was to be used on the insured premises ; but, it was claimed, that it should be held responsible on the ground that, being a member of the Association of Fire Underwriters which had rated Fisher’s Hudson street building at one dollar and ninety cents per hundred, which rate included a chargeTor gasoline, and having issued the policy sued on at that rate, there was an adoption by the defendant company of the rating of the Hudson street building, and — 322 — that it was, therefore, affected with constructive knowledge that gasoline was to be used, and was being paid for, and should be held to have waived its light to interpose the clause of the policy prohibiting the use of gasoline as a bar to this. suit. As will be seen hereafter, this testimony was not a necessary part of the defendant’s case, but, if it saw proper to assume the burden of establishing a negative, there could be no valid objection to it, since it tended to prove that there was not, in the rate charged, anything that would put the insurer upon its inquiry, and charge it with that full knowledge of all the facts which was necessary to constitute a waiver of the clause of the policy relating to gasoline. Reynolds v. Mut. Ins. Co., &c., 34 Md. 280 ; Busby v. Life Ins. Co., 40 Md. 585. The granting of the defendant’s motion to strike out all the evidence of the chief inspector of the Association of Fire Underwriters, and the rejection of the plaintiff’s second and third prayers, which constitute the fourth exception, raise substantially the same question, and they will be considered together. The contention of the appellant is that the implied knowledge which resulted to the appellee from the rate of one dollar and ninety cents per hundred, established by the Association of Fire Underwriters upon the Hudson street building, in which gasoline was allowed to be used, gratified the provision of the policy requiring an express written permit to be endorsed on it, and the appellee, therefore, was equitably estopped from pleading this condition in its defence. The doctrine of equitable estoppels is this: “ Where one party has by his representations, or his conduct, induced the other party to give him an advantage, which it would be against equity and good conscience for him to assert, he would not, in a Court of Justice, be permitted to avail himself of that advantage.” It can only be relied on by a party who has been misled to his injury. Alexander v. Walter et al., 8 Gill, 241 ; Ins. Co. v. Gusdorf, 43 Md. 514; Hardy v. Chesapeake Bank, 51 Md. 562 ; Hurt v. Ripple, 11 Fed. — 323 — Rep. 970; Leather Manufacturers’ Bank v. Morgan et al., 117 U. S. 108. Applying this principle to the case before us, after a most careful examination of the record, we have been unable to discover anything in the declarations- or conduct of the president of the defendant company which tended, in any respect, to mislead a reasonably prudent man to his injury. To sustain the contention of the appellant in this case, would be to relieve the. insured from the discharge of his duty to the insurer and to himself. These obligations were: (1) to state to the insurer every fact relating to this insurance and the subject thereof; and (2) to read his policy, neither of which appears to have been performed. On the contrary, if it be true, as claimed by Fisher, that Koppelman knew that gasoline was to be used in the insured building, then, the proof is that intentionally, or otherwise, this information was not communicated to Williams, the president of the defendant company, who issued the policy. And, whether this omission was intentional or not, the insured is bound by it, because Koppelman was his agent and not the agent of the insurer. He wrote the application for the insurance and tpok it to Williams for Fisher, at his request. Kven if it be conceded (for the sake of the argument) that the rate by which the premium was calculated did constitute an “ awakening circumstance,” yet that mere fact was not sufficient to relieve the insured (or his agent) from his obligation to declare to the insurer that his purpose was to use gasoline. Allegre v. Md. Fire Insurance Company, 8 Gill & Johnson, 190; 2 G. & J. 162; Augusta Ins. Co. v. Abbott, 12 Md. 374. As a depositor in a bank is under the duty of examining his pass-book and the vouchers returned with it, in order to ascertain if his account is correctly kept, so the insured was under the duty of reading his policy, so as to know whether its provisions were in accordance with his application, and the amount o.f premium charged. If Fisher had performed this plain duty, which ordinary diligence'in his affairs required, he would have discovered that by the — 324 — terms of his policy he was forbidden to “ use or allow " gasoline on the insured premises, and this suit might have been .avoided. Leather Manufacturers' Bank v. Morgan, 117 U. S. 106. The testimony of the chief inspector of the Association of Fire Underwriters related entirely to the rating of the Hudson street building, the items which made up the rate, and the custom of the association in furnishing the ratings to its members, and was offered for the manifest purpose of proving constructive knowledge by the president of the defendant company, as to the purpose of the insured to use gasoline, and of excusing Fisher from disclosing to' the defendant company every fact and circumstance which could possibly influence the mind of an intelligent insurer. It was legally insufficient for that purpose, because, by the express terms of the contract its validity depended on a full disclosure, by the insured, of every material circumstance relating ±0 the insurance, or the subject thereof, and the endorsement thereon of the permission to use gasoline. It was conceded that no such disclosure was made, and the mere fact that this policy was issued at the rate fixed by an association, of which the defendant was a member, on an adjoining building, was not sufficient to enable the assured to escape the consequences of the neglect of the plain obligation imposed on him by the contract, which he accepted, and knowledge of which is presumed from such acceptance. Allegre v. Ins. Co., 8 G. & J. 190; Ins. & Banking Co. v. Abbott, 12 Md. 374; Reynolds v. Ins. Co., 34 Md. 280; Busby v. Life Ins. Co., 40 Md. 585-6 ; Beck et al. v. Hibernia Ins. Co., 44 Md. 106. Besides, the record shows that notwithstanding the granting of the defendants motion to strike out the testimony of the chief inspector of the Board of Fire Underwriters, it was treated by the Court, in its rulings on the defendant’s prayers, as still before the jury, and, therefore, no injury resulted to the plaintiff therefrom. It appears from the record'that no exception was taken to the granting of defendant’s prayers, but inasmuch as they were discussed, as if excepted to, we think it proper to say — 325 — that, for the reasons stated, the ruling of the Court below thereon was correct, and that the defence of the company is a bar to any suit on this policy. The judgment will, therefore, be affirmed. (Decided May 8th, 1896). Judgment affirmed.